City of Newcastle v Royal Newcastle Hospital

96 CLR 493
(1957) 31 ALJ 20
(1957) 4 LGRA 69
[1957] ALR 277
[1957] HCA 15

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(Judgment by: Kitto J)

City of Newcastle
v Royal Newcastle Hospital

Court:

Judges: Williams J
Webb J
Fullagar J
Kitto J
Taylor J

Subject References:
Local government
Rating
Exemption from liability
Land of public hospital

Legislative References:
Local Government Act 1919 (NSW) - 132

Judgment date: 1 January 1957

Sydney

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Judgment by:
Kitto J

KITTO J. This appeal is from an order of the Full Court of the Supreme Court of New South Wales dismissing an appeal ^[F25] against a judgment ^[F26] given for the defendant at the trial of an action by a municipal council for rates in respect of the years 1946 to 1952 both inclusive. The appeal depends upon the meaning and application of the provision in par. (d) of s. 132 (1) of the Local Government Act 1919 (N.S.W.) by which all land in a municipality is made rateable except (inter alia) "land which belongs to a public hospital, ... and is used or occupied by the hospital ... for the purposes thereof."

The land in question, being vested for an estate in fee simple in the appellant the Royal Newcastle Hospital, admittedly "belongs", in the relevant sense of the word, to a public hospital. The only question in dispute is whether, in the relevant years, it was "used or occupied by the hospital for the purposes thereof".

The land is an area of two hundred and ninety-one acres of rough bushland comprising stony ridges and deep gullies, heavily timbered, and substantially in its wild natural condition. It is contiguous to other land of the hospital, thirty-six acres in area, on which stand the buildings of the Rankin Park Chest Hospital, a section of the Royal Newcastle Hospital. A portion of this smaller area, comprising seventeen and one-half acres, is fenced and forms what may be described as the curtilage of the chest hospital buildings. The remainder of the thirty-six acres, lying outside the fence, is in its natural state, and, though not physically distinguished from the land which is the subject of this appeal, has not in fact been rated by the council in the relevant years.

The expression "used or occupied" in par. (d) occurs also in par. (f) and the several sub-pars. of par. (h). "Used" suffices for pars. (a), (b), (c) and (e), and the extending portion of par. (j). "Occupied and used" is the expression in par. (g) (ii), in the general portion of par. (h), and in the main portion of par. (j). It seems to me that throughout the section care has been shown to observe a distinction between the occupation and the use of land. Of course, conduct which satisfies the one word may also satisfy the other, and it is not surprising to find the words treated in particular contexts, in some judgments for example, as if they were interchangeable. But there is a distinction nevertheless, and it is suggested by the celebrated passage in the judgment of Lush J. in Reg. v St. Pancras Assessment Committee ^[F27] , at p. 588 as to the meaning of rateable occupation under the Statute of Elizabeth (43 Eliz. c. 2). In words frequently quoted, the learned judge made it clear that an occupation of land involves conduct over and above legal possession; and he went on, in words which are quoted less often, to point out that even actual possession is not enough, for another element in occupation is permanence. Accordingly Bigham J. in Borwick v Southwark Corporation ^[F28] , at p. 83 defined occupation, in words which the Court of Appeal approved in Associated Cinema Properties Ltd v Hampstead Borough Council ^[F29] , as being " 'constituted of legal possession and of permanent (as distinguished from mere temporary) user' " ^[F30] . The three elements, legal possession, conduct amounting to actual possession, and some degree of permanence, seem to me to be involved in the word "occupy" as used in the Local Government Act (N.S.W.). So the courts of that State appear to have considered, for in McLean v Burrangong Shire Council ^[F31] emphasis was laid upon the necessity for something beyond proprietorship, "some physical act of occupation"; and in Colonial Treasurer v Albury Municipal Council ^[F32] it was said by Pring J. that occupation would appear to be something which is definite in its purpose and, to some extent at any rate, continuous. The word "used", on the other hand, does not involve more than physical acts by which the land is made to serve some purpose. The acts no doubt must be recurring, but the notion of continuity or permanence is absent.

One other point should be mentioned concerning the word "occupied". The English authorities as to rateable occupation belong to a specialised field of law, and great care is needed in using them out of context. In particular it is important to note that s. 132 (1) (d) of the Local Government Act (N.S.W.) does not refer to occupation generally; it refers to occupation for specific purposes. I do not think it is correct to take from the English rating cases the principle that title in fee simple in possession is prima facie evidence of occupation and to conclude that, since any occupation which the Royal Newcastle Hospital has must be for its hospital purposes, its title to the subject land is prima facie evidence of occupation for those purposes. The expression in the section "occupied by the hospital for the purposes thereof" is not satisfied, in my opinion, unless there is proof of actual and continuous possession directed to serving the purposes of the hospital. Even in the realm of English rating law, the Court of Appeal said in Associated Cinema Properties Ltd v Hampstead Borough Council ^[F33] , at p. 416 that no case could be cited in which occupation had been held to be established without proof of some overt act amounting to user.

The case for the respondent hospital may be put in alternative ways: first, that the subject land, the two hundred and ninety-one acres, should not be considered separately from the rest of the three hundred and twenty-seven acres, and what was done on the seventeen and one-half acres in the relevant years was in truth a user or occupation of the whole three hundred and twenty-seven acres; or, secondly, that the subject land was separately used or occupied for the purposes of the hospital in those years.

The trial judge seems to have accepted the first of these alternatives, for he held that "the exempted area is the continuous whole in the occupation of the hospital". It is easy to imagine a case in which hospital buildings may take up a small part only of a large park-like area and yet the proper conclusion of fact may be that the whole area is occupied or used for the purposes of the hospital. And of course it is clear that if the whole area is in fact being used or occupied for those purposes it is nothing to the point, in relation to s. 132 (1) (d), to inquire whether so large an area is actually necessary, or is considered by experts to be necessary, for those purposes. What area the hospital should use or occupy is a matter for its governing body to decide. The only relevant inquiry is one of objective fact: what land is the hospital using or occupying for its purposes. For this reason a good deal of expert medical evidence given at the trial in the present case had little if any bearing on the issues to be decided. That there was in the relevant period both a user and an occupation for the purposes of the hospital of the land which formed the site and curtilage of the hospital buildings, no one could doubt. That the conduct which constituted that user and occupation related at least to the whole of the seventeen and one-half acres is equally clear. But did it relate to the whole of the three hundred and twenty-seven acres so as to constitute a user and occupier of that entire area? I think the answer is that an observer of what went on in the years 1946 to 1952 on the respondent hospital's property would be struck at once by the difference in treatment of the seventeen and one-half acres on the one hand and of the rest of the land on the other-not only because a fence divided them, but because the whole of the activities that took place were confined to the land within the fence, that land having been developed and being maintained in a condition suitable for those activities, while the land outside the fence was completely neglected. If asked how much of the land the hospital used or occupied, I cannot doubt that the observer's answer would be that it used and occupied the seventeen and one-half acres, and left the rest completely unused and unoccupied. It would never occur to him, I think, to say that the whole area of virgin bushland, the stony ridges and the impassable gullies, formed a coherent whole, so that the hospital's activities on the seventeen and one-half acres were a use or occupation of that whole. The evidence of his eyes would be too strong. He would no doubt assume that it was considered by the hospital authorities expedient that the land outside the fence should be retained, either for future use by the hospital or to prevent its being used by anyone else; but a conclusion that there was a present and positive use or occupation by the hospital of the whole of the land would not be justified by that assumption and would be, I think, plainly contrary to the fact.

In support of the second alternative proposition reliance is placed by the hospital upon evidence given by several witnesses, which tended to show that the two hundred and ninety-one acres served four specific purposes in relation to the hospital: first, that it ensured the clear atmosphere necessary for the proper treatment of patients; secondly (which seems to come to the same thing), that it acted as a barrier against the approach of buildings, particularly factories, likely to emit smoke, fumes or dust; thirdly, that it provided quiet and serene conditions having psychological advantages to patients suffering from a disease in the treatment of which psychylogical conditions are important; and, fourthly, that it gave opportunity for future expansion of the hospital and the establishment of allied activities. But evidence of this character, even if given complete credence, means only that by owning the subject land the hospital derived the negative advantage of being able to exclude any form of development which it might not wish to see in that portion of its neighbourhood, and the positive advantage of being able to make any future use of the land which it might think desirable. It is surely undeniable that a bare holding of land is neither a use nor an occupation of it, and it makes no difference that the reasons which lead the owner to retain the land unused and unoccupied are logically connected with the pursuit of purposes which he is serving by means of a use or occupation of other land. When it is said that the hospital owned the two hundred and ninety-one acres in the relevant years, all has been said that can be said of the relation of the hospital to that land in those years. And that is not enough to bring the case within s. 132 (1) (d).

In my opinion the appeal should be allowed.